A credit note is used to provide a financial discount to a customer, whether to partially or fully cancel an invoice, or to address discrepancies arising from returned goods, an error in the invoice, an overpayment by the customer, or when granting rewards under loyalty programs.
Once the credit note is issued, you can link it to the original invoice to reduce the outstanding amount, or use it later to settle other invoices for the same customer, or directly issue a refund if necessary.
This guide walks you through the steps in detail.
Creating a Credit Note
To create a credit note, go to "Sales" in the main menu, then select "Credit Notes," and click on the "Create" button.
Enter Credit Note Details:
Edit Fields: You can also hide or display these fields.
Customer: Choose the customer related to the credit note.
Currency: Select the payment currency. The default system currency will appear, but you can change it if the credit note is in another currency.
Date: Choose the issue date of the credit note.
Purchase Order: If you want to link your client credit note to a purchase order, enter the purchase order number.
Project: Select the project related to the credit note, if you want to track amounts associated with specific projects.
Description: Add any notes related to the credit note that you want to include.
Account: Choose the account based on the reason for the discount to ensure accurate recording, which will determine the accounting effect of the credit note (e.g., applying it to "Sales Returns" or "Discounts Given").
Quantity: Specify the quantity of the product or service to be included in the credit note if it relates to a product or service.
Price: Specify the amount of the credit note.
For product items:
item: Choose the product to include in the credit note.
Cost Center: If the credit note is related to a specific cost center, select the cost center from the dropdown list.
Tax Rate: Click to choose the applicable tax rate.
Discount: Click to include a discount percentage on the item.
Handling VAT in Credit Notes
In Wafeq, you can specify whether the prices you enter in the credit note include tax or are tax-exclusive.
To determine this, select from the dropdown list above the credit note item section:
Price Including Tax: This means the price you entered already includes VAT.
Price Excluding Tax: This means the price you entered is before tax, and VAT will be added to the amount.
Example:
Price Including Tax: If you entered 5,000 SAR, this amount includes 15% VAT, which will be approximately 652 SAR.
Price Excluding Tax: If you entered 5,000 SAR net, 750 SAR will be added as VAT, making the total 5,750 SAR.
Adding or Removing Credit Note Items
You can add new items by clicking the "Add Item" button and remove a line by clicking the three dots next to the item line and selecting "Remove."
Notes
Notes: Enter any notes about the credit note.
Finalizing and Saving the Credit Note
Once you enter the credit note details, here are the key options available to finalize and save it:
Attachments: Click here if you want to attach a document or image to the credit note.
Save as Draft: Use this option if you're not ready for final saving yet, so you can return and edit it later.
finalize: Use this option to finalize and approve the credit note.
Print / Download: Click here to preview the credit note as a PDF or print a hard copy.
Document Language: Click here if you want to view the credit note in Arabic.
Template: Choose the design template to be used for this credit note, by clicking the option available under the “Credit Note” section.
You can use credit notes in the following cases:
1. Settling an Invoice Using a Credit Note
If you have an unpaid credit note from a customer, you can use it to settle part or all of the outstanding amount on a new invoice.
How to use it:
Go to the invoice.
Click on the "Apply Credit Note" button in the payments section.
Select the outstanding amounts from unpaid credit notes.
Choose the amount to be deducted from each applicable credit note.
Click "Apply."
2. Issuing a Refund for a Credit Note
If you need to refund an amount from a credit note due to an error in the transaction or a customer’s refund request.
How to use it:
Go to the credit note.
Click on "Record Refund."
Enter the refund date and the refunded amount.
Select the account from which the refund was paid.
Click "Save."
Credit Note List
The Credit Note list provides an overview of all the credit notes you've created, where you can easily review, filter, and take actions directly on them:
Search Bar: Type a keyword (e.g., credit note number, customer name, etc.) to filter the credit notes and find what you're looking for.
All Time: Allows you to select a date range to display data based on the selected period.
ِAdd Filter: Use filters to narrow down results by status (e.g., Draft, Approved), time period, customer, or project.
Sort: You can sort data by date (for example, from oldest to newest or vice versa), alphabetically, or using various other sorting options based on your needs. You can also apply multiple sorting criteria simultaneously and easily rearrange the selected options by dragging and moving them, helping you present your data in a more organized and user-friendly way.
Export: Download the credit note list in your preferred format, such as CSV or Excel (You can find this option by tapping the three dots on the screen).
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Import: Upload credit notes in bulk (You can find this option by tapping the three dots on the screen) .
For more details, please refer to the guide.
Note:
Editing a credit note is allowed if the customer is in Stage One, with no restrictions except in one case: when the credit note status is Paid. In this case, the payment must be canceled first before any edits can be made.
If the customer is in Stage Two, the credit note cannot be edited under any circumstances, in accordance with the applicable regulatory authority’s rules.
Available actions on the Credit Note
From the credit note list, make sure the view is set to Table, then click on the required credit note.
Click the More actions (⋮) icon at the top of the invoice to view the additional available actions.
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Change status to Draft: Use the Change status to Draft option to revert the credit note from Finalized to Draft, allowing you to edit the credit note details or correct any errors before finalizing it again.
When the credit note is in Draft status, the Finalize option appears instead, allowing you to convert the invoice from Draft to Finalized.
Print / Download: Use the Print / Download option to obtain a copy of the invoice in PDF format or to print it directly.
Send: Send the credit note to the customer via WhatsApp or email.
Edit: Allows you to edit the credit note, save the changes, and approve it again.
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History: Displays the details of the employee who created the notification, and if any changes are made, the modification date will also be displayed.
Bulk Actions for Credit Note
After creating and issuing multiple credit notes, you may need to perform actions on a group of credit note together instead of opening each one individually. Wafeq allows you to select multiple credit notes from the credit notes list and apply bulk actions to them at once.
To do this, go to “Credit Note” under “Sales” from the main menu, then select the required credit note using the check boxes in the left column of the table, and then click the arrow to display a list of available actions that can be performed on the selected items.
- Revert to Draft: Used to return the selected credit notes from Approved status back to Draft, allowing you to edit their details or correct any errors before approving them again.
- Delete: Used to delete the selected credit notes, provided they are still in Draft status. This is helpful when removing test credit notes or credit notes created by mistake before approval, ensuring they are removed completely without leaving any accounting or tax impact.
- Download PDF: Used to download the selected credit notes as PDF files in one action. After downloading, they will appear on your device inside a compressed ZIP file.
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Finalize: Used to approve the selected credit notes in one action and convert them from Draft status to finalized status.
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